The shares of Florida-based freight concern CSX Corporation (NASDAQ:CSX) have flexed some technical muscle since bouncing from $59 in late December -- a level that coincides with a bull gap from last April -- and has since added 28%, to trade at $74.83. And while CSX stock pulled back after its April 2 all-time peak of $77.15, a historically bullish signal suggests new highs could be on the horizon.
Specifically, CSX shares are trading within one standard deviation of their 40-day moving average after a lengthy stretch above it, defined for this study as 60% of the time in the last two months and 80% of the time in the past 10 trading days. There have been 12 other times this signal has sounded in the past three years, resulting in an average one-month gain of 4.47% for CSX.
A round of bullish brokerage notes could fuel tailwinds for CSX shares While nine of 19 analysts still maintain a "hold" or "sell" rating on a stock that's up 20% year-to-date, the average 12-month price target of $77.57 is a slim 3.9% premium to current trading levels. This leaves the door open for upgrades and/or price-target hikes -- possibly in the wake of the company's first-quarter earnings report, due next Tuesday, April 16 -- which could draw more buyers to the table.
Knight-Swift Transportation Holdings Inc (NYSE:KNX) is another stock in the transports sector that's flashing a bullish technical signal. The shares of the Arizona-based trucking company rallied from a late-December low of $23.27 to a two-month high of $35.30 on Feb. 20. The security has drifted lower from here, last seen at $33.01, but is now testing support at its 160-day moving average.
According to White, there have been seven previous occurrences in the last three years where KNX has come within one standard deviation of this trendline after trading above it for a notable period. These prior signals translated into an average one-month positive return of 4.37% for the stock.
A round of short covering could create a boon for KNX stock, too. Short interest surged 21.7% in the most recent reporting period to 28.88 million shares. This accounts for a roughly 23% of the equity's available float, or 14 times Knight--Swift Transportation's average daily pace of trading.